China has agreed to start formal talks with Japan on a treaty that would allow joint development of gas resources in contested waters between the often-fractious east Asian powers.

The offer of formal talks made by Wen Jiabao, Chinese premier, during a visit to Tokyo on Monday, suggests Beijing is ready to move forward on long-stalled plans for co-operation in the East China Sea, that are intended to remove one of the biggest sources of friction between Tokyo and Beijing.

The offer was accompanied by bilateral agreements on issues ranging from maritime security to food safety that will fuel hopes of further improvement in a Sino-Japanese relationship that is one of the region’s deepest and potentially most dangerous diplomatic faultlines.

Japan and China agreed to work together to exploit gas resources in the area in 2008, but Beijing has shown little interest in pursuing the plan, despite repeated calls from Japan for detailed negotiations to turn the agreement into something concrete.

In early May, China finally agreed to informal discussions between senior bureaucrats on gas exploitation, according to people familiar with the issue, but the contacts yielded little hint of any substantive change of attitude.

Japanese officials said it was unclear why Mr Wen was now calling for “an early start to negotiations for an international treaty”, but that the surprise move was welcome. “It's a major breakthrough,” said one Japanese official. “The question we have to consider is why Premier Wen has given us this present at this time.”

China did not offer any explanation on Monday.

Li Guoqiang, an expert on the geography and history of China’s borderlands at the Chinese Academy of Social Sciences, cautioned that negotiations were likely to take a long time. “This is about making an abstract agreement concrete,” he said.

Mr Li said one reason for the slow pace in moving forward on the joint exploration plans had been the need for China to form positions internally on a myriad of detail issues such as how revenues of companies involved in future joint exploration should be taxed.

China and Japan have long disagreed sharply on the extent of their exclusive economic zones in the East China Sea, raising potentially dangerous disputes over ownership of potentially rich gas reserves in the area.

Tokyo says its zone extends to a median line between the two countries' territories, while Beijing says its zone stretches much closer to Japan.

A high profile dispute centres on Chinese exploitation of the Chunxiao field, which Japan has said could draw gas from its side of the median line. Under the 2008 deal, Beijing said Chinese state-owned energy companies operating in Chunxiao would “welcome the participation” of Japanese investors in the field.

The deal also sets aside a large block of contested territory for joint exploration, intended to lead to joint development under the “principle of mutual benefit”.

In a move that could help to ease frictions between Chinese and Japanese naval forces, Mr Hatoyama and Mr Wen also agreed to create a maritime crisis management mechanism between their defence authorities direct a communications channel.

The agreement follows a series of incidents involving vessels of the Chinese People's Liberation Army navy and Japan's Maritime Self-Defence Force that have prompted public diplomatic complaints from both sides in recent weeks.

In a further signal of goodwill, Mr Wen called for “active use” of a hotline between leaders of the two nations, Tokyo and Beijing agreed in 2008 to set up a leaders’ hotline for “frequent and timely” communications, but Japanese officials say it never seems to have been seriously used.

China and Japan agreed Monday to reestablish a hotline between the premiers of the two countries and resume formal talks on seabed gas exploration in the East China Sea, the Xinhua News Agency reported.

The pledge was made in Tokyo during talks between visiting Chinese Premier Wen Jiabao and Japanese Prime Minister Yukio Hatoyama.

The Kyodo News Agency reported that Japan and China discussed more than 10 years ago the launch of a hotline between their leaders, but their efforts never came to fruition.

That looks to change, though, as a Japanese government official was Monday quoted by Reuters as saying that the two leaders agreed to activate a hotline to discuss what Wen called "important issues" between the two nations and to avert emergencies. The hotline would be between only political leaders, not defense chiefs.

Huang Dahui, a professor of Japanese politics at Renmin University of China, told the Global Times that the establishment of the hotline is a show of deepening bilateral relations, as well as increasing disputes between China and Japan.

China's rapid economic growth has led to the co-existence of two major powers in Asia, creating more competition and cooperation, and necessitating the need for the high-level hotline, Huang said.

Huang argued that historical issues haven't been the focus of Sino-Japanese ties since 2006, when Junichiro Koizumi stepped down as Japanese prime minister, but mu-tual mistrust is still the biggest problem between the two counties, especially in their maritime strategies.

Wen and Hatoyama also reportedly reached a deal to establish a maritime crisis management mechanism between defense departments, following a series of disputes at sea.

The Japanese Ministry of Defense complained last month that Chinese military helicop-ters twice buzzed Japanese naval vessels that were monitoring Chinese military activities in the East China Sea and in international waters. Chinese defense officials responded by saying Japan shouldn't take "drastic action" to disrupt Chinese vessels undergoing training exercises.

Hatoyama relayed his concerns to Wen over such recent encounters and urged Beijing not to let similar incidents occur again, Kyodo reported.

In a speech given later to the Japanese Business Federation, Wen pledged that "China will keep taking the path of peaceful development in the long term."

Sun Zhe, director of the Research Center for Sino-US Relations at Tsinghua University, noted that the East China Sea issue between China and Japan is very complicated and serious. It's a territorial dispute involving resource exploitation and maritime security.

China claims indisputable sovereignty over the Diaoyu Islands and adjacent islets in the East China Sea. Japan also regards the Diaoyu Islands as its own territory.

The two countries also disagree on overlapping claims of their extended continental shelf where both countries have oil-drilling platforms.

"It is an issue that could easily cause skirmishes and trigger escalated clashes," Sun said. "Both governments have realized its importance and begun to set up a prevention mechanism."

Wen and Hatoyama agreed Monday to resume negotiations on implementing a principled consensus on the East China Sea issue reached two years ago - a move seen by ana-lysts as a step forward.

According to the agreement from 2008, the Japanese side can participate in the cooperative development of the Chunxiao oil and gas field in accordance with relevant laws of China, but "cooperative development" is different than "joint development."

The leaders also signed agreements on food safety, energy conservation, environmental protection and e-commerce.

"Despite all the disputes over the East China Sea and food safety, the major tendency of Sino-Japanese ties is positive, with their economic fates increasingly intertwined," Huang said.

For China, Japan's technology and direct investment, which totaled $4.1 billion in 2009, are vital for future development.

On the other hand, demand from China and other emerging Asian markets has helped Japan recover from its worst recession in decades, while an easing of travel restrictions has triggered a surge in Chinese tourism to Japan.

China is Japan's top trade partner, with two-way business reaching about $230 billion last year, exceeding Japan-US trade for the third year in a row.

Japanese business leaders see more opportunities in Chinese demand.

But some see a blow to Japanese pride from the rise of China, which is expected to overtake Japan as the world's second-largest economy as early as this year.

"China sees Japan as a strategic partner, not a competitor or a rival. The two neighbors should view each other as partners so as to have peaceful coexistence and long-lasting friendship," Premier Wen said Monday in Japan.